05MORINAGA MILK Sustainability Report 2019 102-1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 102-45, 201-1

Corporate name: MORINAGA MILK INDUSTRY CO., LTD.Head office address: 33-1, Shiba 5-Chome, Minato-ku, Tokyo 108-8384 Japan Representative: President and Representative Director : Michio Miyahara

Executive Vice President and Representative Director : Junichi Noguchi

Founded: September 1, 1917Established: April 13, 1949Capital: 21,731 million yen (as of March 31, 2019)Number of employees

(non-consolidated): 3,247 (as of March 31, 2019)(consolidated): 6,157 (as of March 31, 2019)

Business: Production and sale of milk, dairy products, ice cream, beverages, and other foods

URL: https://www.morinagamilk.co.jp/english/Business sites (as of March 31, 2019):15 plants and chilled products coordination centers

(Saroma Plant, Betsukai Plant, Morioka Plant, Fukushima Plant, Tone Plant, Tokyo Plant, Tokyo Tama Plant, Yamato Plant, Chilled Products Coordination Center – East Japan, Matsumoto Plant, Fuji Plant, Chukyo Plant, Kinki Plant, Kobe Plant, Chilled Products Coordination Center – West Japan)

Six regional offices, order control centers and administration support centers (Tohoku Branch, Metropolitan Regional Office, Administration Support Center, Order Control Center, Central Japan Regional Office, West Japan Regional Office)

One Research/Information Center (in Zama-shi)

Corporate Profile

Morinaga Milk Industry Sales Co., Ltd.Napoli Ice Cream Co., Ltd.Morinaga Milk Industry Hokkaido Co., Ltd.MK Cheese Co., Ltd.Furijiport Co., Ltd. Morinaga Rakunou Co., Ltd. Towa Techno Co., Ltd. Rizan CorporationMM Property Funding Corp.Tokachi Urahoro Morinaga Milk Industry Co., Ltd. Tohoku Morinaga Milk Industry Co., Ltd.Yokohama Morinaga Milk Industry Co., Ltd. Morinaga-Hokuriku Milk Industry Co., Ltd. Kumamoto Morinaga Milk Industry Co., Ltd.Clinico Co., Ltd. Tokyo Dairy Co., Ltd. Morinaga Milk Industry Kyushu Co., Ltd. Chez Forêt Co., Ltd. Morinyu Sunworld Co., Ltd.Morinaga Engineering Co., Ltd. Sunfco Ltd. Hokkaido Hosho Milk Plant Co., Ltd. Nihon Seinyu Fuji Morinaga Milk Industry Co., Ltd. Toyo Fermented Milk Co., ltd.Hiroshima Morinaga Milk Industry Co., Ltd. Okinawa Morinaga Milk Industry Co., Ltd.

Domestic Consolidated Subsidiaries

Morinaga Nutritional Foods, Inc.MILEI GmbHMorinaga Milk Industry（Shanghai）Co., Ltd. Morinaga Nutritional Foods（Asia Pacific）Pte. Ltd.PT. Kalbe Morinaga Indonesia

Main Overseas Subsidiaries and Joint Ventures

About Us [ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us

Corporate Mission Commitment of the President Progress of Sustainability Initiatives CSR of Morinaga Milk Seven Priority Issues Health and Nutrition The Environment Human Rights Supply Chains Nurturing the Next Generation Human Resource Development Corporate Governance

Data Book Third Party Assurance GRI Content Index

06MORINAGA MILK Sustainability Report 2019 102-2

Morinaga Milk has developed a variety of products and services based on our Corporate Philosophy: “Contribute to healthy and enjoyable lifestyles through offering unique products derived from advanced milk technology.”

Since the founding as Nippon Rennyu Co., Ltd. in 1917, Morinaga Milk has created many products using milk technology.

Morinaga Milk has researched many nutritious and functional ingredients based on milk, including the 1969 discovery of the Bifidobacterium longum BB536, which has promise as an effective regulator of intestinal function by improving intestinal flora, and lactoferrin, an important component that provides protective benefits in infants, which Morinaga Milk has researched since the 1960s.

Morinaga Bifidus Yogurt was launched in 1978 as a yogurt containing the Bifidobacterium longum BB563. This product continues to protect the health of consumers to this day.

Later Morinaga BF-L Dry Milk was launched to become the world’s first infant and toddler milk to contain lactoferrin, which provides protective benefits in infants.

Morinaga Milk is also distinguished by its many pioneering products, leveraging the company’s outstanding development capabilities and technology.

In 1961, the sale of Creap, Japan’s first creaming powder for coffee, began. Once instant coffee took root and a coffee culture spread in Japan, Creap became such a popular product that its advertising slogan became “Coffee is no good without Creap.” This product was supported by Morinaga Milk’s proprietary manufacturing technology. The product’s feature is being “derived from 100% milk ingredients” that other companies cannot emulate. Creap is still the leading creaming powder for the coffee market that Morinaga Milk created.

Moreover, Morinaga Milk launched Japan’s first chilled cup-type drinks in plastic cups using long-life production methods in 1985. The stylish and easy-to-carry containers that hold just the right amount to drink were popular. In 1993, Mt. Rainier Caffé Latte was launched in the chilled cup-type drink market which Morinaga Milk created. While drinking coffee away from home was strongly associated with canned coffee and coffee shops, this product pursued the best balance between expresso and milk. Mt. Rainier Caffé Latte is still a long-standing favorite among chilled cup-type drinks.

Going forward, Morinaga Milk will continue aiming to develop products that pursue “health” and “deliciousness.”

Product Categories

[ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us

Corporate Mission Commitment of the President Progress of Sustainability Initiatives CSR of Morinaga Milk Seven Priority Issues Health and Nutrition The Environment Human Rights Supply Chains Nurturing the Next Generation Human Resource Development Corporate Governance

Data Book Third Party Assurance GRI Content Index

07MORINAGA MILK Sustainability Report 2019 102-2

MilkMorinaga Oishii Gyunyu Milk, Makiba no Sora Milk, etc.

BeveragesChilled cup-type coffee Mt. Rainier Caffé Latte, and chilled cup-type tea Lipton Tea, etc.

YogurtBifidus Plain Yogurt, Lactoferrin Yogurt, Triple Attack Yogurt, etc.

Chilled DessertsMorinaga Yaki Pudding, Morinaga Milk Pudding, etc.

Food Service & Institutional Food Products Products for the restaurant industry, etc.

Ice CreamPino, MOW, PARM, etc.

Creap, Condensed Milk, and Other ProductsCreap, Morinaga Condensed Milk, Morinaga Silken Tofu (Long-Life-TOFU), etc.

Cheese and ButterKRAFT Slice Cheese, Morinaga Hokkaido Butter, etc.

Infant Formula and Baby FoodsInfant formula Morinaga E-Akachan, Morinaga Chil-mil, specialized formula New MA-1, and baby food Vegetable Jelly, etc.

Products for Overseas MarketsWe supply a variety of products worldwide.

Health FoodPowdered Milk for adults Milk Life, supplements using bifidus, etc.

Liquid Diet and Nursing Care FoodLiquid diet, easily-swallowed foods, and nutrition supplements, etc. (Clinico Co., Ltd.)

Home Delivery ProductsMorinaga Caldus Milk, Chokatsu Milk, etc.

Slightly Acidic Electrolyzed Water GeneratorEquipment for maintaining a high level of hygiene in places that handle food, such as plants and shops.

Product Categories

[ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us

Corporate Mission Commitment of the President Progress of Sustainability Initiatives CSR of Morinaga Milk Seven Priority Issues Health and Nutrition The Environment Human Rights Supply Chains Nurturing the Next Generation Human Resource Development Corporate Governance

Data Book Third Party Assurance GRI Content Index

08MORINAGA MILK Sustainability Report 2019 102-2

Brand License Agreement

Kraft

Technical alliance for cheese and cheese-related products in 1970.KRAFT is the trademark of Kraft Foods.

Lipton

Business alliance in 1984.Sale of products such as chilled tea beverages.Lipton is a trademark of Unilever.

Sunkist

Conclusion of trademark licensing agreement in 1971.Sale of products such as fruit beverages.Sunkist is the registered trademark of Sunkist Growers, Inc., U.S.A.

[ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us

Corporate Mission Commitment of the President Progress of Sustainability Initiatives CSR of Morinaga Milk Seven Priority Issues Health and Nutrition The Environment Human Rights Supply Chains Nurturing the Next Generation Human Resource Development Corporate Governance

Data Book Third Party Assurance GRI Content Index

09MORINAGA MILK Sustainability Report 2019 102-7, 201-1

Financial Highlights Shares (as of March 31, 2019)Number of authorized shares: 144,000,000 sharesNumber of issued and outstanding shares: 49,458,374 shares (excludes 351,669 shares of treasury stock)Number of shareholders: 26,718

Major shareholders (as of March 31, 2019)

ShareholderNumber of shares held (1,000 shares)

Percentage of shares held

Morinaga & Co., Ltd. 5,249 10.61%

Mizuho Bank, Ltd. 2,445 4.94%

The Master Trust Bank of Japan, Ltd. (Trust Account) 2,016 4.08%

Goldman Sachs International 1,854 3.75%

Japan Trustee Services Bank, Ltd. (Trust Account) 1,746 3.53%

MUFG Bank, Ltd. 1,388 2.81%

Japan Trustee Services Bank, Ltd. (Trust Account 9) 1,341 2.71%

SMBC Trust Bank Ltd. (Sumitomo Mitsui Banking Corporation Retirement Benefit Trust Account) 1,328 2.69%

Morinaga Milk Employees’ Shareholding Association 969 1.96%

Mitsubishi UFJ Trust and Banking Corporation 923 1.87%

* Percentages of shares held are calculated based on the number of shares issued and outstanding after the subtraction of shares of treasury stock.

Distribution of Shares (as of March 31, 2019)

WEB Detailed information on performance is posted on the Investor Relations (IR) site.▶https://www.morinagamilk.co.jp/english/ir/

By Business Segment (Fiscal 2018)

Net Sales Operating Income

Functional and food ingredients business (B-to-B business)

¥96.9 billion ¥5.8 billion

International business ¥28.9 billion ¥1.6 billion

Health and nutritional food business ¥49.1 billion ¥3.1 billion

B-to-C business ¥310.7 billion ¥10.5 billion

* Segment names are those used in the previous Medium-term Business Plan. There are discrepancies with the segment names used in the current Medium-term Business Plan.

Financial institutions39.1%

Foreigners (non-Japanese)

22.8%

Other Japanese corporations

18.4%

Others 2.7%

Individuals17.2%

2014 2015 2016 2017 20180

200

400

600

800

594.8 601.5 592.6 592.1 583.6

(Fiscal year)

(Billion yen)

Net Sales

0

5

10

15

20

25

6.88.2

22.323.2

21.7 22.421.1

22.0

14.3 15.0

2014 2015 2016 2017 2018 (Fiscal year)

(Billion yen)

Operating Income / Ordinary Income Operating Income　 Ordinary Income

0

5

10

15

20

70

140

210

280

350

4.2

10.6

13.2

15.814.0

84

214

267

319283

2014 2015 2016 2017 2018 (Fiscal year)

(Billion yen)

Profit Attributable to Parent Company Shareholders / Net Income per Share

Profit Attributable to Parent Company Shareholders　 Net Income per Share

(Yen)

Note: Decimals have been rounded up to one decimal place.